Tobacco Warehouse in Central KY Gets New Life

Source from:  AP 01/10/2012

A historic tobacco warehouse in central Kentucky is getting new life. There have been eight auctions at Peoples Tobacco Warehouse in Danville since the facility was renovated. It's the first time the warehouse has been used in almost 10 years. Jerry Rankin, who is leasing the building, says growers have traveled from Virginia, Ohio and Indiana to participate in the auctions. Independent auction houses have dwindled in Kentucky since the 2004 federal tobacco buyout and the loss of price supports. The auctions once attracted more than 20 million pounds of leaf to Danville. This year, Rankin says the total could reach about 3.5 million pounds. The only other independent auctions in the state that he is aware of will happen in Lexington, Mount Sterling and Maysville. Many tobacco growers got out of the business, opting to grow crops like corn and soybeans. Others now sell directly to tobacco companies. Rankin said about 2 million pounds of tobacco has been sold at Peoples and another local tobacco warehouse. Prices hovered in December around $1.79 per pound, a strong sign compared to the previous year, when farmers were lucky to get $1.49 per pound. In 2010, much of the tobacco crop was discounted and judged to be poor. He said there was good tobacco coming in, but it was devalued because a large amount of leaf had dried out instead of curing properly. The crop grown in 2011 is dramatically better, Rankin said. Although there is less leaf, it is graded higher because there were high moisture levels during the curing season. Rankin said he expects sales at the warehouses to run through mid-February. Although the landscape is still shifting, Rankin said he thinks a few independent auction houses will survive for a little longer. "If we can keep integrity in the business and strip (the tobacco) clean, I think there is a good future, especially for the next four to six years," he said. Enditem